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2024 (4) TMI 194 - AT - Income TaxDenial of benefit provided u/s 11(2) on the reasoning that the form 10 was not filed along with the return of income - HELDTHAT - Admittedly the form 10 was filed by the assessee claiming the exemption u/s 11(2) of the Act after the due date of return filing but before the completion of the assessment. The Hon ble High Court of Gujarat in the case of ACIT v/s. Stock Exchange Ahmedabad 2012 (10) TMI 706 - GUJARAT HIGH COURT has held that the assessee is entitled for the benefit of u/s 11 of the Act if the form 10 is filed before the completion of the assessment. Thus we hold that the assessee cannot be denied the benefit of section 11(2) merely on the reasoning that form 10 was filed by the assessee belatedly in the given facts and circumstances. Decided in favour of assessee. Amount accumulated in the earlier year has not been shown as income under the provision of section 11(3) - grievance of the revenue that the assessee has re-accumulated the fund which was to be treated as income under the provision of section 11(3) - HELD THAT - This finding of the revenue is contrary to the facts available on record. From the above form 10 it is clearly spelt out that the fund was accumulated out of the current year gross receipt. Thus it can be safely inferred that the accumulated amount in the earlier year has not been reaccumulated in the year under consideration. In view of the above we set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is hereby allowed.
Issues involved:
1. Benefit u/s 11(2) of the Income Tax Act - Form 10 filing 2. Treatment of accumulated amount under section 11(3) of the Act Issue 1: Benefit u/s 11(2) of the Income Tax Act - Form 10 filing The appeal was filed by the Assessee against the order of the Commissioner of Income Tax (Appeals), Ahmedabad, regarding the assessment order passed u/s 143(3) of the Income Tax Act, 1961 for the Assessment Year 2016-17. The primary contention was the denial of benefit u/s 11(2) of the Act due to the belated filing of form 10 by the Assessee. The Assessee, a trust, claimed exemption u/s 11(2) of the Act, which was disallowed by the Assessing Officer (AO) as form 10, necessary for claiming such accumulation, was filed after the due date of return filing. The issue was further taken up to the Commissioner of Income Tax (Appeals) who upheld the AO's decision. The Assessee then appealed to the Appellate Tribunal. The Tribunal noted that the form 10 was filed before the completion of the assessment, thus complying with the requirements of section 11(2) of the Act. Citing a relevant High Court judgment, the Tribunal held that the Assessee was entitled to the benefit of u/s 11 of the Act if the form 10 was filed before the completion of the assessment. Consequently, the Tribunal set aside the order of the Commissioner and directed the AO to delete the addition made, allowing the Assessee's appeal. Issue 2: Treatment of accumulated amount under section 11(3) of the Act The second issue revolved around the treatment of an accumulated amount under section 11(3) of the Act, specifically concerning a sum of Rs. 15,53,217 accumulated in the earlier year. The AO observed that this amount was not offered as income in the current year's computation, leading to a disagreement with the Assessee's submission. The Assessee contended that the accumulated amount had been shown as income in the income and expenditure account for the previous year. The AO, however, disagreed, stating that the Assessee had re-accumulated the amount and not utilized it as required. The Commissioner of Income Tax (Appeals) upheld the AO's decision. Upon appeal to the Appellate Tribunal, it was observed that the accumulated amount in the earlier year had not been re-accumulated in the current year, as evidenced by the details in form No. 10. Therefore, the Tribunal set aside the Commissioner's findings and directed the AO to delete the addition made, thereby allowing the Assessee's appeal. In conclusion, the Appellate Tribunal ruled in favor of the Assessee on both issues, granting the benefit u/s 11(2) of the Act and clarifying the treatment of the accumulated amount under section 11(3) of the Act.
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